OT: Assaulted Over Linux

[William Muriithi]

Kelly,

>
> >
>
> >> "Still have a job? Then keep driving foreign."
>
> It amazes me that people (in both Canada and the US), would rather
> blame my intelligent purchasing decisions over somebody else's poor
> business decisions.


Actually, those stickers should never make you guilty. They are just funny
and indicate the driver in front of you either have direct interest with the
american car manufactures NOT their country or he/she is so out of touch
with reality its not even funny. I think buying american car does not help
in job saving much.  Most of those american cars are mainly build in south
America and other countries where labour is cheap. On the hand, foreign cars
manufacturers do have a good percentage of their cars in North America
manufactured in North America.

 In fact, this is one case where Bush got it right when he said its throwing
good money after bad money. And however sad it is when someone looses a job,
this is one case where these guys made their bed and should go ahead and
sleep on it. Heck, they lobbied the government when California attempted to
enforce some efficiency, exactly what the Japanese has been doing for decade
and how is the japanese manufacturers, healthy. Okay, I take that back, but
at least they are better shape than american mafucturers. So if you look at
the problem from the government perspective, more jobs may actually be saved
by backing the efficient once, saving on oil imports and other externalities
related to inefficient cars.

 Now, why is it a futile thing to attempt saving american car manufacturers.
I have three good reasons.

1) Time: If you look closely, car manufacturing is more like writing an
operating system, a very evolutionary activity. You build on your previous
position. If you have a lousy product, it make it all that hard to ever
catch up with those who have perfected the art. If you doubt the
evolutionary nature of the industry, look at Toyota tudra. Now I do not own
one, but if you google for a couple of minutes on that brand, you will
notice it has had a lot of reliability problems. That despite it was made by
Toyota which is synonymous with reliability and over a billion dollars of
investment. They will never catch up of ford for have perfected that sector.

2) Oil: Most people have concluded the recent $146 a barrel price what a
market fuck ups. I believe it was purely driven by business fundamentals.
Yeah the price of oil is now selling at $47 a barrel, but when you factor
how far the world growth has fallen, $47 a barrel start looking way too
expensive. Seriously, mid last year, the world growth rate was over 5%.
Today, they are projecting it at -0.5%. That again is GLOBAL growth. If you
were to convert that percentage change to dollars, it would be an imaginable
number. Add the fact that we are not expected to see the end of this until
2010 if we are lucky. And yet, despite all that gloom, oil can hold at that
price. I was expecting it to drop to $10. What this imply is when we finally
turn the corner and start seeing some growth,  you can expect a price of
$146 and above. Its that or we stay in recession for ever.

3) Cultural change: North American society has been one very lucky
community. They were in position to afford a living standard most of us only
dream of. Then came globalization. Note, I am not against globalization, but
the way it was implemented was seriously baised toward the rich. A story for
another day, but if you are interested, read the Roaring nineties by Joseph
Stiglitz. That has destroyed the middle class for good, the major buyers for
American cars. The rich tend to buy Lamborghini, Ferari, BMW etc. Those cars
that are stylish and good image. Since then, the house industry was the the
single main factor making middle class family feel rich. That is now gone
and with it the purchasing power of most americans. The American cars do not
sell well outside America. Reason, any car with power above 2 litre engine
is considered a guzzlers to most people outside america. The chinese do tend
to love huge cars, but that market is cornered by chinese domestic
manufactures with the help of Chinese government. I can not blame them, we
are doing the same here.


With this in mind, I tend to think supporting American cars is not worth it.
There is just way too much head wind for very weak companies. True, they may
survive, but tax payers are going to pay way to much for that to happen. If
the government chicken and decide to back them well and good, but they
should inform us of the full price we should be expected to foot. Not try to
play Iraq game again - oh, it will just cost us $50 billion and then turn
around an pull a 3 trillion bill. Read The three trillion dollar war by
Stinglitz if you want to find more.

Disclaimer, I may be seriously wrong here, as I can not claim to be
objective. I do hate the guzzlers and that mean a not too balanced
analysis.  That said, I look forward to see if time will validate my
observation

Regards,

William
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